Wednesday, December 2nd, 2015

Financial Results Highlights:

Fourth Quarter 2015 Compared with Fourth Quarter 2014:

- Net income of $1,214 million, up 13%; adjusted net income(1) of $1,264 million, up 14%

- EPS(2) of $1.83, up 17%; adjusted EPS(1,2) of $1.90, up 17%

- ROE of 12.9%, compared with 13.1%; adjusted ROE(1) of 13.5%, compared with 13.7%

- Provisions for credit losses of $128 million, compared with $170 million

- Basel III Common Equity Tier 1 Ratio of 10.7%

- Dividend increased by $0.02 from the preceding quarter to $0.84

Fiscal 2015 Compared with Fiscal 2014:

- Net income of $4,405 million, up 2%; adjusted net income(1) of $4,681 million, up 5%

- EPS(2) of $6.57, up 2%; adjusted EPS(1,2) of $7.00, up 6%

- ROE of 12.5%, compared with 14.0%; adjusted ROE1 of 13.3%, compared with 14.4%

- Book value per share of $56.31, up 17%

- Provisions for credit losses of $612 million, compared with $561 million

- Dividend increased by $0.04 or 5%

TORONTO, ONTARIO--(Marketwired - Dec 2, 2015) - For fiscal 2015, BMO Financial Group (TSX: BMO)(NYSE: BMO) reported net income of $4,405 million or $6.57 per share on a reported basis and net income of $4,681 million or $7.00 per share on an adjusted basis. For the fourth quarter ended October 31, 2015, net income was $1,214 million and EPS was $1.83. Adjusted net income was $1,264 million and adjusted EPS was $1.90.

"BMO posted a strong finish to the year, delivering record results, with $4.7 billion in adjusted net income, and adjusted earnings per share of $7.00, up 6% from last year," said Bill Downe, Chief Executive Officer, BMO Financial Group. "These results reflect the benefits of our diversified business mix, with Canadian and U.S. Banking and Wealth Management all contributing to the bank's growth.

"For the first time, our Personal and Commercial Banking and Wealth Management businesses in the U.S. generated adjusted earnings of more than $1 billion. With the acquisition of GE Capital Transportation Finance which closed today, we continue to strengthen our large, well-established North American commercial banking customer base.

"Our business is still fundamentally about people helping people. We are increasingly adept at thinking like customers, using online and mobile to dramatically increase the number of customers we can serve. And when we get the digital and the personal in balance, the result is perfectly aligned with our brand promise - and will be difficult to duplicate.

"As we look ahead, our well-diversified portfolio of businesses provides a strong platform from which we will continue to deliver profitable growth."


(1)  Results and measures in this document are presented on a GAAP basis.  

     They are also presented on an adjusted basis that excludes the impact 

     of certain items. Adjusted results and measures are non-GAAP and are   

     detailed for all reported periods in the Non-GAAP Measures section,   

     where such non-GAAP measures and their closest GAAP counterparts are  


(2)  All Earnings per Share (EPS) measures in this document refer to diluted

     EPS unless specified otherwise. EPS is calculated using net income    

     after deductions for net income attributable to non-controlling       

     interest in subsidiaries and preferred share dividends.               


Note: All ratios and percentage changes in this document are based on unrounded numbers.

Concurrent with the release of results, BMO announced a first quarter 2016 dividend of $0.84 per common share up $0.02 per share or 2% from the preceding quarter and up $0.04 per share or 5% from a year ago, equivalent to an annual dividend of $3.36 per common share.

BMO's 2015 audited annual consolidated financial statements and accompanying management's discussion & analysis (MD&A), along with the supplementary financial information report, are available online at and at

Total Bank Overview

Net income was $1,214 million for the fourth quarter of 2015, up $144 million or 13% from the prior year.

Adjusted net income was $1,264 million, up $153 million or 14% from the prior year with good income growth across all of our operating groups. Adjusted EPS was up 17% year-over-year. Return on equity was 12.9% and adjusted return on equity was 13.5%. Book value per share increased 17% from the prior year to $56.31 per share. The Basel III Common Equity Tier 1 Ratio was strong at 10.7%.

Operating Segment Overview

Canadian P&C

Net income was $560 million and adjusted net income was $561 million both up $34 million or 7% from the prior year. Revenue was up $58 million or 3% from the prior year due to higher balances across most products and increased non-interest revenue. Expenses increased $28 million and adjusted expenses increased $27 million or 3% reflecting continued investment in the business, net of lower employee-related costs. Adjusted operating leverage was 0.1%. Year-over-year loan growth was 4% and deposit growth was 5%.

In our personal banking business, year-over-year loan and deposit growth was 3% and 4%, respectively. During the quarter, MoneySense(tm) magazine named our Premium Cashback MasterCard for Business as Canada's #1 Business CashBack Card in their annual credit card rankings. Our Summer Campaign was a success with a 26% increase in sales of everyday banking plans and higher products per customer compared to the prior year.

In our commercial banking business, loans and deposits grew 6% and 7% year-over-year, respectively. During the quarter, World Finance magazine named BMO the Best Commercial Bank in Canada in their 2015 Banking Awards. The World Finance awards celebrate achievement and innovation in the financial industry, and BMO was recognized as a result of our commitment to building customer relationships, innovative solutions and strong regional and industry focus, particularly in Aboriginal Banking and Women in Business. In our upper mid-market business we launched equipment leasing to expand our product offerings. We remain second in Canadian business banking loan market share for small and medium-sized loans.

U.S. P&C

Net income of $207 million increased $38 million or 23% from a year ago. Adjusted net income of $221 million increased $39 million or 22%. All amounts in the remainder of this section are on a U.S. dollar basis.

Net income of $157 million increased $6 million or 4% from a year ago. Adjusted net income of $167 million increased $5 million or 3%, driven by lower provisions for credit losses.

Revenue of $723 million remained stable as higher loan and deposit volume and mortgage banking revenue were offset by lower net interest margin. Adjusted non-interest expense of $474 million increased $14 million or 3% primarily due to higher employee-related costs.

Year-over-year loan growth was $2.0 billion or 3%, led by good growth in commercial and industrial (C&I) loans of $3.1 billion or 11%.

During the quarter, the Federal Deposit Insurance Corporation released their annual deposit market share results. In the Chicago and Wisconsin areas we maintained our strong second place rankings, as BMO Harris Bank's deposit market share improved to 12.5% and 12.8% respectively. We maintained our number four market share ranking within our primary footprint of Wisconsin, Illinois, Missouri, Kansas, Indiana, and Minnesota.

On September 10, 2015, we announced the signing of an agreement to acquire General Electric Capital Corporation's (GE Capital) Transportation Finance business with net earning assets of approximately $8.9 billion U.S. dollars on closing. The acquisition builds on our position as a market leader in commercial banking and enhances our business position in the United States by further diversifying net income, adding scale and enhancing profitability and margins. The acquisition is expected to close in the first quarter of 2016.

Wealth Management

Net income was $243 million up $18 million or 8% from a year ago. Adjusted net income of $271 million increased $19 million or 8% from a year ago. Adjusted net income in traditional wealth was $214 million, driven by a gain on sale and underlying business growth, despite softer equity markets, partially offset by a legal reserve. Adjusted net income in traditional wealth was up $79 million or 60%. Adjusted net income in insurance was $57 million, compared to $117 million a year ago due to high actuarial benefits in the prior year.

Assets under management and administration grew by $70 billion or 9% from a year ago to $864 billion, driven by favourable foreign exchange movements and market appreciation. During the quarter, BMO Private Bank was named Best Domestic Private Bank, U.S. for 2015 by Global Financial Market Review for the third consecutive year. We were chosen for our client service, high-quality wealth advisors and innovative solutions demonstrating our team's consistent dedication to our clients, understanding their needs and delivering a great product offering.

On September 30, 2015, we closed the sale of BMO's U.S. retirement services business and BMO Benefit Services. These transactions are consistent with BMO Global Asset Management's strategy to focus on our world-class asset management business.

BMO Capital Markets

Net income of $242 million increased $51 million or 27% from a year ago. Revenue increased $127 million or 16%. Excluding the impact of the stronger U.S. dollar, revenue increased $71 million or 9%. Trading Products revenue increased due to higher trading revenue, including the unfavourable impact of implementing a funding valuation adjustment in the prior year, and higher securities commissions and fees. Investment and Corporate Banking revenue increased due to higher lending revenue. Both Trading Products and Investment and Corporate Banking revenue were impacted by lower securities gains. Excluding the impact of the stronger U.S. dollar, non-interest expenses were relatively unchanged, increasing $3 million.

During the quarter, BMO Capital Markets was named Best Bank for Canadian Dollar Foreign Exchange for the fifth consecutive year by FX Week magazine. We also closed on the sale of our U.S. municipal bond sales, trading and origination business. We remain firmly committed to our U.S. platform and this transaction enables us to focus resources on our core U.S. fixed income businesses.

BMO Capital Markets participated in 286 new global issues in the quarter, comprising 122 corporate debt deals, 123 government debt deals and 41 equity transactions, raising $920 billion.

Corporate Services

Corporate Services adjusted net loss for the fourth quarter of 2015 was $32 million, compared with an adjusted net loss of $41 million a year ago.

Adjusted results in these Total Bank Overview and Operating Segment Overview sections are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.


BMO's Basel III Common Equity Tier 1 (CET1) Ratio was 10.7% at October 31, 2015. The CET1 Ratio increased by approximately 30 basis points from 10.4% at the end of the third quarter primarily due to an increase in CET1 Capital and also due to lower risk-weighted assets.

Provision for Credit Losses

The total provision for credit losses (PCL) was $128 million, a decrease of $42 million from the prior year primarily due to net recoveries in Corporate Services and lower provisions in Canadian P&C.


The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

Regulatory Filings

Our continuous disclosure materials, including our interim filings, annual Management's Discussion and Analysis and audited consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular are available on our website at, on the Canadian Securities Administrators' website at and on the EDGAR section of the SEC's website at

Bank of Montreal uses a unified branding approach that links all of the organization's member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. As such, in this document, the names BMO and BMO Financial Group mean Bank of Montreal, together with its subsidiaries.

Financial Review

The Financial Review commentary is as of December 1, 2015. The Financial Review should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2015, included in this document, as well as the audited consolidated financial statements for the year ended October 31, 2015, and Management's Discussion and Analysis (MD&A) for fiscal 2015. The material that precedes this section comprises part of this Financial Review.

The annual MD&A includes a comprehensive discussion of our businesses, strategies and objectives, and can be accessed on our website at Readers are also encouraged to visit the site to view other quarterly financial information.




Table of Contents                                                           


5   Summary Data                  14  Review of Operating Groups'          


6   Non-GAAP Measures                 14  Personal and Commercial Banking   


7   Caution Regarding Forward-            15  Canadian Personal and        

    Looking Statements                        Commercial Banking (Canadian 


8   Foreign Exchange                      16  U.S. Personal and Commercial 

                                              Banking (U.S. P&C)           

8   Net Income                        18  Wealth Management                

9   Revenue                           19  BMO Capital Markets              

10  Provisions for Credit Losses      20  Corporate Services, Including    

                                          Technology and Operations         

11  Impaired Loans                20  Risk Management                      

11  Insurance Claims, Commissions 21  Interim Consolidated Financial       

    and Changes in Policy Benefit     Statements                           


11  Non-Interest Expense              21  Consolidated Statement of Income 

11  Income Taxes                      22  Consolidated Statement of        

                                          Comprehensive Income             

12  Capital Management                23  Consolidated Balance Sheet       

13  Eligible Dividends Designation    24  Consolidated Statement of Changes

                                          in Equity                         

                                  25  Other Investor and Media Information 




Bank of Montreal's management, under the supervision of the CEO and CFO, has evaluated the effectiveness, as of October 31, 2015, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended October 31, 2015, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.

As in prior quarters, Bank of Montreal's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release.



Summary Data                                                         Table 1


(Canadian $ in millions, except                             Fiscal   Fiscal

 as noted)                       Q4-2015 Q3-2015  Q4-2014     2015     2014


Summary Income Statement                                                   

Net interest income                2,367   2,272    2,178    8,970    8,461

Non-interest revenue (1)           2,615   2,554    2,462   10,419    9,762


Revenue (1)                        4,982   4,826    4,640   19,389   18,223

Insurance claims, commissions                                              

 and changes in policy benefit                                             

 liabilities (CCPB) (1)              265     218      300    1,254    1,505


Revenue, net of CCPB               4,717   4,608    4,340   18,135   16,718

Specific provision for credit                                              

 losses                              128     160      170      612      561

Non-interest expense               3,093   2,971    2,887   12,182   10,921

Provision for income taxes           282     285      213      936      903


Net income                         1,214   1,192    1,070    4,405    4,333


  Attributable to bank                                                     

   shareholders                    1,206   1,185    1,057    4,370    4,277

  Attributable to non-                                                     

   controlling interest in                                                 

   subsidiaries                        8       7       13       35       56


Net income                         1,214   1,192    1,070    4,405    4,333


Adjusted net income                1,264   1,230    1,111    4,681    4,453


Common Share Data ($ except as                                             


Earnings per share                  1.83    1.80     1.56     6.57     6.41

Adjusted earnings per share         1.90    1.86     1.63     7.00     6.59

Earnings per share growth (%)       17.3     7.8     (2.5)     2.5      3.9

Adjusted earnings per share                                                

 growth (%)                         16.6     7.5      0.6      6.2      6.1

Dividends declared per share        0.82    0.82     0.78     3.24     3.08

Book value per share               56.31   55.36    48.18    56.31    48.18

Closing share price                76.04   72.98    81.73    76.04    81.73

Total market value of common                                               

 shares ($ billions)                48.9    46.9     53.0     48.9     53.0

Dividend yield (%)                   4.3     4.5      3.8      4.3      3.8


Financial Measures and Ratios                                              


Return on equity                    12.9    13.6     13.1     12.5     14.0

Adjusted return on equity           13.5    14.0     13.7     13.3     14.4

Net income growth                   13.5     5.9     (0.4)     1.7      3.3

Adjusted net income growth          13.9     5.7      2.1      5.1      5.4

Revenue growth (1)                   7.4     2.0      7.4      6.4      8.3

Adjusted revenue growth, net of                                            

 CCPB                                8.7     9.4      8.2      8.5      8.7

Non-interest expense growth          7.1     7.9     11.9     11.5      6.8

Adjusted non-interest expense                                              

 growth                              6.9     8.0     14.1      9.8     10.3

Efficiency ratio (1)                62.1    61.6     62.2     62.8     59.9

Adjusted efficiency ratio (1)       60.8    60.5     61.1     60.9     59.1

Adjusted efficiency ratio, net                                             

 of CCPB                            64.2    63.4     65.3     65.2     64.4

Operating leverage (1)               0.3    (5.9)    (4.5)    (5.1)     1.5

Adjusted operating leverage, net                                           

 of CCPB                             1.8     1.4     (5.9)    (1.3)    (1.6)

Net interest margin on average                                             

 earning assets                     1.57    1.55     1.60     1.55     1.60

Effective tax rate                  18.8    19.3     16.6     17.5     17.2

Adjusted effective tax rate         18.9    19.4     16.8     18.0     17.5

Return on average assets            0.70    0.71     0.69     0.66     0.72

Provision for credit losses-to-                                            

 average loans and acceptances                                             

 (annualized)                       0.15    0.20     0.23     0.19     0.19


Balance Sheet (as at $ millions,                                           

 except as noted)                                                          

Assets                           641,881 672,442  588,659  641,881  588,659

Net loans and acceptances        334,024 329,179  303,038  334,024  303,038

Deposits                         438,169 447,617  393,088  438,169  393,088

Common shareholders' equity       36,182  35,560   31,273   36,182   31,273

Cash and securities-to-total                                               

 assets ratio (%)                   27.8    29.3     30.2     27.8     30.2


Capital Ratios (%)                                                         

Common Equity Tier 1 Ratio          10.7    10.4     10.1     10.7     10.1

Tier 1 Capital Ratio                12.3    11.7     12.0     12.3     12.0

Total Capital Ratio                 14.4    13.7     14.3     14.4     14.3


Foreign Exchange Rates                                                     

As at Cdn./U.S. dollar            1.3075  1.3080   1.1271   1.3075   1.1271

Average Cdn./U.S. dollar          1.3191  1.2671   1.1114   1.2550   1.0937



(1)  Commencing in Q1-2015, insurance claims, commissions and changes in   

     policy benefit liabilities (CCPB) are reported separately. They were  

     previously reported as a reduction in insurance revenue in non-interest

     revenue. Prior period amounts and ratios have been reclassified.      


Adjusted results are non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP Measures section.

Non-GAAP Measures

Results and measures in this MD&A are presented on a GAAP basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS. They are also presented on an adjusted basis that excludes the impact of certain items as set out in Table 2 below. Management assesses performance on a reported basis and on an adjusted basis and considers both to be useful in assessing underlying ongoing business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. It also permits readers to assess the impact of certain specified items on results for the periods presented and to better assess results excluding those items if they consider the items to not be reflective of ongoing results. As such, the presentation may facilitate readers' analysis of trends, as well as comparisons with our competitors. Adjusted results and measures are non-GAAP and as such do not have standardized meaning under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from or as a substitute for GAAP results.



Non-GAAP Measures                                                    Table 2


(Canadian $ in millions, except                             Fiscal   Fiscal

 as noted)                      Q4-2015  Q3-2015  Q4-2014     2015     2014


Reported Results                                                            

Revenue (1)                       4,982    4,826    4,640   19,389   18,223

Insurance claims, commissions                                              

 and changes in policy benefit                                              

 liabilities (CCPB) (1)            (265)    (218)    (300)  (1,254)  (1,505)


Revenue, net of CCPB              4,717    4,608    4,340   18,135   16,718

Provision for credit losses        (128)    (160)    (170)    (612)    (561)

Non-interest expense             (3,093)  (2,971)  (2,887) (12,182) (10,921)


Income before income taxes        1,496    1,477    1,283    5,341    5,236

Provision for income taxes         (282)    (285)    (213)    (936)    (903)


Net Income                        1,214    1,192    1,070    4,405    4,333

EPS ($)                            1.83     1.80     1.56     6.57     6.41



Adjusting Items (Pre-tax)                                                  

Amortization of acquisition-                                               

 related intangible assets (2)      (43)     (40)     (42)    (163)    (140)

Acquisition integration costs                                              

 (3)                                (20)      (9)     (11)     (53)     (20)

Restructuring costs (4)               -        -        -     (149)       -


Adjusting items included in                                                

 reported pre-tax income            (63)     (49)     (53)    (365)    (160)



Adjusting Items (After tax)                                                

Amortization of acquisition-                                                

 related intangible assets (2)      (33)     (32)     (32)    (127)    (104)

Acquisition integration costs                                              

 (3)                                (17)      (6)      (9)     (43)     (16)

Restructuring costs (4)               -        -        -     (106)       -


Adjusting items included in                                                

 reported net income after tax      (50)     (38)     (41)    (276)    (120)

Impact on EPS ($)                 (0.07)   (0.06)   (0.07)   (0.43)   (0.18)



Adjusted Results                                                           

Revenue (1)                       4,984    4,826    4,640   19,391   18,223

Insurance claims, commissions                                              

 and changes in policy benefit                                             

 liabilities (CCPB) (1)            (265)    (218)    (300)  (1,254)  (1,505)


Revenue, net of CCPB              4,719    4,608    4,340   18,137   16,718

Provision for credit losses        (128)    (160)    (170)    (612)    (561)

Non-interest expense             (3,032)  (2,922)  (2,834) (11,819) (10,761)


Income before income taxes        1,559    1,526    1,336    5,706    5,396

Provision for income taxes         (295)    (296)    (225)  (1,025)    (943)


Net income      &n

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BMO Financial Group Reports Net Income $44 Billion Fiscal 2015; Fourth Quarter Net Income 13%



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